New chief to take leash off ACCC

Peter Ker

AUSTRALIA'S competition watchdog will not be deterred by last week's loss in the Federal Court and will instead launch even more ambitious enforcement cases that test the limits of consumer law.

Speaking just days after the Australian Competition and Consumer Commission (ACCC) lost a legal fight against Metcash's acquisition of rival supermarket chain Franklins, new ACCC chairman Rod Sims said his organisation would not be intimidated by the prospect of spending more time in the courts.

The ACCC was ordered to pay Metcash's legal costs on Thursday, after Justice Arthur Emmett deemed the $215 million acquisition would not harm competition in the supermarket sector.

The loss could be heavier than first thought for the ACCC, with Metcash believed to be considering an application for higher-than-usual costs known as indemnity costs.

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But in one of his first major speeches since becoming chairman, Mr Sims said the ACCC would not be scared away from seeking to prevent acquisitions that substantially lessened competition.

''We will not be swayed from fulfilling that mandate by any potential increase in the prospect of litigation,'' he said.

Mr Sims said he wanted the ACCC to test the outer limits of consumer law by pursuing cases in which it had a greater chance of failure.

''The ACCC's success rate in first-instance litigation stands at almost 100 per cent. This is frankly too high,'' he said.

''I'm happy with the implication that ACCC staff handle cases well, but the flip side is that we have been too risk-averse.

''We need to take on more cases where we see the wrong but court success is less assured.''

Mr Sims said aspects of the new predatory pricing laws and laws surrounding exclusionary conduct were among those he was keen to see tested first.

In a further insight into the new era at the ACCC, Mr Sims promised that the electricity sector would come under increased scrutiny, given soaring power bills were at the heart of concerns about the rising cost of living in Australia.

He promised to particularly focus on customer confusion around electricity pricing options, and the effect that improved reliability standards were having on household bills.

''The market is not truly competitive where there is bad sales behaviour or where confused consumers don't understand price structures and are switching retailers against their interests,'' Mr Sims said.

Online retailers will also face greater scrutiny, with Mr Sims predicting the ACCC will be increasingly relied on to protect consumers as online shopping becomes ''more mainstream''.

He said there would be ''novel enforcement challenges'' for regulators given many online retailers have no physical presence in Australia.

''There are a substantial number of transient online traders where we will frankly look for creative solutions to secure compliance and enforce the law,'' he said.